2021-24330. Loan Guaranty: Maximum Allowable Fees for Legal Services  

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    AGENCY:

    Department of Veterans Affairs.

    ACTION:

    Notice.

    SUMMARY:

    This notice provides updated information to participants in the Department of Veterans Affairs (VA) Home Loan Guaranty program concerning the maximum allowable fees for legal services performed in connection with the foreclosure of single-family housing loans. This notice also provides updated information concerning the legal fees for bankruptcy-related services. The table in this notice contains the amounts the Secretary has determined to be reasonable and customary in all states, following an annual review of the amounts allowed by other Government-related home loan programs.

    DATES:

    The new maximum allowable fees for legal services will be allowed for all guaranty claims submitted to VA on or after December 8, 2021.

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    FOR FURTHER INFORMATION CONTACT:

    Mr. Andrew Trevayne, Assistant Director for Loan and Property Management, Loan Guaranty Service (261), Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 632-8795. (This is not a toll-free number.)

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    SUPPLEMENTARY INFORMATION:

    The VA Home Loan Guaranty program authorized by title 38, United States Code, chapter 37, offers a partial guaranty against loss to lenders who make home loans to Veterans. VA regulations concerning the payment of loan guaranty claims are set forth at 38 CFR 36.4300, et seq. Computation of guaranty claims is addressed in 38 CFR 36.4324, which states that one part of the indebtedness upon which the guaranty percentage is applied is the “[a]llowable expenses/advances as described in [38 CFR 36.4314].” 38 CFR 36.4324(a)(2). Section 36.4314(b)(5)(ii) describes the procedures to be followed in determining what constitutes the reasonable and customary fees for legal services performed in connection with the foreclosure of single-family housing loans.

    Pursuant to § 36.4314(b)(5)(ii), the Secretary is required to annually review allowances for legal fees in connection with the foreclosure of single-family housing loans, including bankruptcy-related services, issued by the Department of Housing and Urban Development (HUD), the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). In March 2021, Fannie Mae issued revisions to their allowances for legal fees. Fannie Mae, Allowable Foreclosure Attorney Fees Exhibit, Servicing Guide (March 10, 2021), https://servicing-guide.fanniemae.com. The following month, HUD announced its plans to adopt Fannie Mae's fee structure by August. HUD, National Servicing Center Single Family Housing Policy Handbook 4000.1 Section III: Servicing and Loss Mitigation Key Changes (April 22, 2021), https://www.hud.gov/​sites/​dfiles/​SFH/​documents/​sfh_​hb_​4000_​1_​sect_​3_​serv_​loss_​mit_​04_​22_​21.pdf. Freddie Mac has also announced new allowances for legal fees, effective September 27, 2021. Freddie Mac, Approved Attorney Fees and Title Expenses, Seller/Servicer Guide Exhibit 57A (September 27, 2021), https://guide.freddiemac.com/​app/​guide/​exhibitRev/​57A,09-27-2021.

    VA has reviewed and considered the legal fees allowed by each entity. Based on increases in fees for legal services announced by these Government-related home loan programs, the Secretary is publishing in the Federal Register a table setting forth the revised amounts the Secretary has determined to be reasonable and customary. The table reflects the primary method for foreclosing in each state, either judicial or non-judicial, with the exception of those states where either judicial or non-judicial is acceptable. The use of a method not authorized in the table will require prior approval from VA. This table will be available throughout the year at: https://www.benefits.va.gov/​HOMELOANS/​servicers_​valeri_​rules.asp.

    There has been no change to the amounts VA will allow for bankruptcy filing fees. However, VA is clarifying that VA allows for a bankruptcy filing fee regardless of whether a bankruptcy release is obtained. VA notes that its current regulation at 38 CFR 36.4314(b)(5)(i) authorizes “[f]ees for legal services actually performed.” Regardless of whether a bankruptcy filing results in a release, legal services may have been performed in addressing the filing. Allowing fees for a bankruptcy filing is also consistent with the other Government-related home loan programs. See HUD, National Servicing Center Single Family Housing Policy Handbook 4000.1 Section III: Servicing and Loss Mitigation Key Changes (April 22, 2021), https://www.hud.gov/​sites/​dfiles/​SFH/​documents/​sfh_​hb_​4000_​1_​sect_​3_​serv_​loss_​mit_​04_​22_​21.pdf.;​; Fannie Mae, Allowable Bankruptcy Attorney Fees Exhibit, Servicing Guide (September 11, 2019), https://servicing-guide.fanniemae.com;​; Freddie Mac, Approved Attorney Fees and Title Expenses, Seller/Servicer Guide Exhibit 57A (September 27, 2021), https://guide.freddiemac.com/​app/​guide/​exhibitRev/​57A,09-27-2021. VA will continue to monitor fees for legal services on an annual basis and publish updates in the Federal Register as VA deems necessary.

    The following table reflects the Secretary's determination of the reasonable and customary fees for legal services for the primary method for foreclosing in each state. Start Printed Page 61857

    JurisdictionVA non-judicial foreclosure 12VA judicial foreclosure 12Deed-in-lieu of foreclosure
    Alabama$1,700N/A$400
    Alaska2,000N/A400
    American Samoa1,600N/A400
    Arizona1,700N/A400
    Arkansas1,700N/A400
    California1,700N/A400
    Colorado2,100N/A400
    ConnecticutN/A3,100400
    DelawareN/A2,250400
    District of Columbia1,5002,875400
    FloridaN/A4,100400
    Georgia1,700N/A400
    Guam2,000N/A400
    HawaiiN/A4,500400
    Idaho1,450N/A400
    IllinoisN/A3,000400
    IndianaN/A3,000400
    Iowa1,2752,450400
    KansasN/A2,400400
    KentuckyN/A3,000400
    LouisianaN/A2,500400
    MaineN/A3,250400
    Maryland3,000N/A400
    MassachusettsN/A3,400400
    Michigan1,900N/A400
    Minnesota1,775N/A400
    Mississippi1,500N/A400
    Missouri1,700N/A400
    Montana1,700N/A400
    Nebraska1,400N/A400
    Nevada2,000N/A400
    New Hampshire1,700N/A400
    New JerseyN/A4,350400
    New MexicoN/A4,000400
    New York—Western Counties 3N/A4,200400
    New York—Eastern CountiesN/A5,225400
    North Carolina2,175N/A400
    North DakotaN/A2,200400
    OhioN/A3,000400
    OklahomaN/A2,700400
    Oregon1,7003,700400
    PennsylvaniaN/A3,125400
    Puerto RicoN/A2,700400
    Rhode Island2,250N/A400
    South CarolinaN/A2,850400
    South DakotaN/A2,250400
    Tennessee1,500N/A400
    Texas1,700N/A400
    Utah1,700N/A400
    VermontN/A3,200400
    Virgin IslandsN/A2,500400
    Virginia1,700N/A400
    Washington1,700N/A400
    West Virginia1,450N/A400
    WisconsinN/A2,500400
    Wyoming1,450N/A400
    1  When a foreclosure is stopped due to circumstances beyond the control of the holder or its attorney (including, but not limited to bankruptcy, VA-requested delay, property damage, hazardous conditions, condemnation, natural disaster, property seizure or relief under the Servicemembers Civil Relief Act) and then restarted, VA will allow a $400 restart fee in addition to the base foreclosure attorney fee. This fee recognizes the additional work required to resume the foreclosure action, while also accounting for the expectation that some work from the previous action may be utilized in starting the new action.
    2  VA will allow attorney fees of $1,050 (chapter 7) or $1,500 (initial chapter 13) for an initial bankruptcy filing, regardless of whether a bankruptcy release is obtained. For multiple bankruptcy filings under either chapter, VA will allow an additional $500.
    3  Western Counties of New York for VA are: Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Livingston, Monroe, Niagara, Ontario, Orleans, Steuben, Wayne, Wyoming and Yates. The remaining counties are in Eastern New York.
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    Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this document on November 1, 2021 and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs.

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    Luvenia Potts,

    Regulation Development Coordinator, Office of Regulation Policy & Management, Office of General Counsel, Department of Veterans Affairs.

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    [FR Doc. 2021-24330 Filed 11-5-21; 8:45 am]

    BILLING CODE 8320-01-P

Document Information

Published:
11/08/2021
Department:
Veterans Affairs Department
Entry Type:
Notice
Action:
Notice.
Document Number:
2021-24330
Dates:
The new maximum allowable fees for legal services will be allowed for all guaranty claims submitted to VA on or after December 8, 2021.
Pages:
61856-61858 (3 pages)
PDF File:
2021-24330.pdf
Supporting Documents:
» Cost-of-Living Adjustments for Service-Connected Benefits
» Meetings: National Academic Affiliations Council; FR Doc. 2021–26252
» Meetings: National Research Advisory Council; FR Doc No: 2021-24893
» Agency Information Collection Activities; Proposals, Submissions, and Approvals: Survey of Healthcare Experiences of Patients-Dental Care Patient Satisfaction Survey; FR Doc No: 2021-24865; OMB Control No. 2900-0764
» Meetings: Health Care Access Standards for Veteran Community Care Program; FR Doc No: 2021-24571
» Agency Information Collection Activities; Proposals, Submissions, and Approvals: Statement of Assurance of Compliance with 85 Percent Enrollment Ratios; OMB No. New; FR Doc No: 2021-21761
» Agency Information Collection Activities; Proposals, Submissions, and Approvals: Report of General Information, Report of First Notice of Death, Report of Nursing Home or Assisted Living Information, Report of Defense Finance and Accounting Service, Report of Non-Receipt of Payment, Report of Incarceration, Report of Month of Death; OMB No. 0734; FR Doc. 2021–20919
» Meetings: Advisory Committee on Structural Safety of Department of Veterans Affairs Facilities; FR Doc No: 2021-19428
» Agency Information Collection Activities; Proposals, Submissions, and Approvals: CHAMPVA Benefits-Application, Claim, Other Health Insurance, Potential Liability and Miscellaneous Expenses; OMB No. 0219; FR Doc No: 2021-18952
» Meetings: Rehabilitation Research and Development Service Scientific Merit Review Board; FR Doc. 2021–14616